The complexity of governance is difficult to capture in a simple definition.
The need for governance exists anytime a group of people come together to accomplish an end. Though the governance literature proposes several definitions, most rest on three dimensions: authority; decision-making, and accountability. At the Institute, our working definition of governance reflects these dimensions:
Governance determines who has power, who makes decisions, how other players make their voice heard and how account is rendered.
Ultimately, the application of good governance serves to realize organizational and societal goals.
The following examples help our understanding of each of the three dimensions of governance. Where a group is too large to efficiently make all necessary decisions, it creates an entity to facilitate the process. Group members delegate a large portion of the decision-making responsibility to this entity. In voluntary sector organizations this entity is the board of directors. In a public sector context this may be a board of directors, a committee or a project management team. One simple definition of governance is “the art of steering societies and organizations.” Governance is about the more strategic aspects of steering, making the larger decisions about both direction and roles.
Some observers criticize this definition as being too simple. Steering suggests that governance is a straightforward process, akin to a steersman in a boat. These critics assert that governance is neither simple nor neat — by nature it may be messy, tentative, unpredictable and fluid. Governance is complicated by the fact that it involves multiple actors, not a single helmsman.
These multiple actors are the organization’s stakeholders. They articulate their interests; influence how decisions are made, who the decision-makers are and what decisions are taken.
Decision-makers must absorb this input into the decision-making process. Decision-makers are then accountable to those same stakeholders for the organization’s output and the process of producing it.
Governance is also a highly contextual concept. The process and practices that will apply will vary significantly given the environment in which they are applied. Governance in the public sector needs to take into account legal and constitutional accountability and responsibilities. In the non-governmental sector, representing stakeholder interests may be a determining factor in the governance to be applied. Even within these sectors, size, shape, form and function will vary greatly from one organization to the next. When working in the field of governance, one operates in an area where one size does (never) not fit all.